The QRMP scheme streamlines GST compliance for small businesses by allowing quarterly tax filing with monthly payments, helping to reduce administrative burden and improve cash flow management.
What is the QRMP scheme?
The Quarterly Return Monthly Payment (QRMP) Scheme is a compliance initiative under GST that allows small taxpayers to file
GSTR-1 and
GSTR-3B returns quarterly, while making monthly tax payments. It simplifies
GST compliance by reducing the filing frequency for businesses with a turnover of up to Rs. 5 crore. Under this scheme, businesses can claim
input tax credit based on their GSTR-2B, easing cash flow. The QRMP Scheme is designed to reduce compliance burdens and ease cash flow management for eligible businesses. Additionally, it allows taxpayers to file quarterly GST returns while paying taxes monthly, offering greater flexibility and supporting small businesses with
GST return management.
Eligibility criteria for QRMP scheme
The QRMP Scheme is available for taxpayers with a specific turnover threshold and requires a valid GSTIN.
- Applicable to GST-registered taxpayers with an annual turnover of up to Rs. 5 crore.
- Taxpayers with multiple registrations under the same PAN can opt in if each GSTIN qualifies.
- Option available for both regular and new taxpayers.
- Eligible for taxpayers who have filed their last return (GSTR-3B) before opting in.
- Ideal for businesses with stable cash flows and lower transaction volumes.
- Not available for taxpayers who have opted for the Composition Scheme.
- Can be selected on the GST portal, based on turnover eligibility.
- Option to switch between QRMP and monthly filing available during prescribed periods.
How to opt-in for the QRMP scheme?
Opting in for the QRMP Scheme requires a few steps on the GST portal, allowing eligible taxpayers to simplify their filing process.
- Log in to the GST portal using your GSTIN and password.
- Go to the ‘Services’ section and select ‘Returns’ followed by ‘Opt-in for Quarterly Return.’
- Choose the relevant financial year and period to apply the QRMP scheme.
- Select the quarterly filing option for GSTR-1 and GSTR-3B.
- Confirm and submit your preference on the GST portal.
- Acknowledgement is provided after successful selection of the QRMP scheme.
- Taxpayers can opt out during the quarterly window if they wish to revert to monthly filing.
- The selection remains effective until the taxpayer chooses to opt out or becomes ineligible.
How to make monthly tax payments under the QRMP scheme?
Under the QRMP Scheme, taxpayers must make monthly payments despite quarterly filings. The table below outlines payment methods and considerations using GSTR-2B.
| Payment Method | Description | Frequency |
| Fixed Sum Method | Pay 35% of the previous quarter’s tax liability as per GSTR-3B. | Monthly |
| Self-Assessment Method | Calculate liability based on actual sales and purchases, using GSTR-2B to estimate input tax credit. | Monthly |
| PMT-06 Challan | Required for both methods; used for paying tax online. | Monthly |
| Adjustment in GSTR-3B | Any excess payment can be adjusted in the quarterly GSTR-3B return. | Quarterly (at filing time) |
Claim input tax credit under the QRMP scheme
Under the QRMP Scheme, taxpayers can claim Input Tax Credit (ITC) to reduce their tax liability, following certain guidelines.
- Refer to GSTR-2B for a summary of available ITC.
- Match input tax details with invoices and credit notes before claiming.
- Claim only ITC that pertains to purchases used for business purposes.
- Avoid claiming ITC on blocked items as specified under GST law.
- Ensure timely invoice upload from suppliers to reflect in GSTR-2B.
- Verify the ITC amount against actual purchases and payments.
- Adjust ITC claims in the quarterly GSTR-3B, ensuring accuracy.
- Maintain records for verification and audit purposes, as required by law.
Interest in the QRMP scheme
Interest on delayed tax payments under the QRMP Scheme is charged in specific cases. The table below summarises applicable interest rates:
| Condition | Interest Rate | Description |
| Delay in Tax Payment | 18% p.a. | Interest on unpaid monthly tax if not paid within the due date. |
| Excess payment made | Nil | No interest on excess payments; can be adjusted in the next tax period. |
| Interest on incorrect ITC claims | 24% p.a. | Charged on ITC claimed incorrectly in the quarterly GSTR-3B |
The late fee under the QRMP scheme
Late fees are applicable if there are delays in filing returns under the QRMP Scheme. The table below details late fee charges:
| Return Type | Late Fee per Day | Maximum Late Fee |
| GSTR-1 | Rs. 50 | Rs. 5,000 per quarter for late filing of quarterly returns. |
| GSTR-3B | Rs. 50 | Rs. 5,000 per quarter for late filing of quarterly returns. |
| Nil Return Filing | Rs. 20 | Rs. 500 per quarter for both GSTR-1 and GSTR-3B. |
Challenges under QRMP
Despite its benefits, the QRMP Scheme poses certain challenges for
B2B businesses, requiring careful planning and management.
- Requires regular monthly tax payments, which may affect cash flow for small businesses.
- Possible discrepancies between GSTR-2B and supplier invoices can delay ITC claims.
- This may increase reliance on accurate bookkeeping and timely supplier compliance.
- Limited to taxpayers with annual turnover up to Rs. 5 crore, restricting larger businesses.
- Requires consistent monitoring of payments and invoices despite quarterly filing.
- Non-compliance can lead to interest or penalties, affecting business finances.
- Adjusting to monthly payments can disrupt budget planning for some businesses.
- Requires regular assessment of tax liability even without monthly GSTR-1 filing.
Conclusion
The QRMP Scheme offers small businesses a flexible GST compliance solution by reducing the frequency of returns and allowing for manageable monthly tax payments. This framework helps ease compliance burdens and improves cash flow management, essential for steady operations. For businesses aiming to maintain timely payments or invest in growth opportunities, a
business loan can provide crucial capital. This financial support enables businesses to thrive within the QRMP framework, ensuring they stay compliant while expanding operations effectively.
